Luxury Buyers Drifted North, But the Tide May Be Turning
New data shows Sydney and Melbourne underperformed during the lifestyle-migration boom, but shifting price gaps suggest prestige buyers may be circling back.
3 min
Australia’s luxury housing map has been flipped on its head over the past five years, but the pendulum may finally be swinging back toward the big cities.
According to Ray White Group Senior Data Analyst Atom Go Tian, the pandemic years reshaped where prestige buyers put their money.
“If you were speaking about luxury houses five years ago, you wouldn’t even consider markets outside of Sydney and Melbourne,” he says.
But when COVID accelerated lifestyle migration and buyers were suddenly free to look elsewhere, the country’s wealthiest house hunters proved highly mobile.
“Luxury buyers proved themselves to be the most flexible and flocked away to where luxury was still sold at a discount,” Tian says. The result: Sydney and Melbourne were largely overlooked while regional prestige markets surged.
Both major cities saw their luxury prices spike briefly in 2021 as the COVID boom lifted the entire country, but the gains evaporated almost as quickly.
Rising interest rates and the lure of discounted luxury in the regions saw Sydney and Melbourne lose roughly half their 2021 uplift the following year.
The recovery since has been patchy. Tian says Sydney “grew six per cent between 2024 and 2025 after growing just two per cent between 2023 and 2024 to finally reach a new peak luxury price of $4.5 million”.
Melbourne, meanwhile, still hasn’t clawed back its pandemic peak. Luxury prices there rose five per cent between 2024 and 2025 after falling one per cent the year prior, ending 2025 at $2.6 million.
Over five years, the two major cities have been dwarfed by the east-coast lifestyle markets that stole their thunder. Sydney grew 35 per cent and Melbourne just 17 per cent.
Compare that with Brisbane (+77 per cent), Perth (+76 per cent), Adelaide (+73 per cent), the Gold Coast (+72 per cent), and the Sunshine Coast (+68 per cent).
That surge allowed the Sunshine Coast ($2.76 million) and Gold Coast ($2.86 million) to overtake Melbourne ($2.62 million) as the second and third most expensive luxury markets in the country.
Brisbane ($2.32 million) and Perth ($2.30 million) are now only 12 per cent cheaper than Melbourne, a huge shift from 2020 when both were 43 per cent cheaper.
Many assumed this decentralised luxury map was the new normal. But Tian says the last 12 months hint at a potential reversal.
“It’s easy to assume the new normal is a decentralised luxury market, but if the last 12 months signal what’s to come, luxury buyers may just be beginning to rediscover the value of Sydney’s prestige waterfront streets and Melbourne’s leafy inner suburbs.”
The price gaps that once tempted buyers north and west have narrowed. In 2020, Sydney was twice as expensive as the Gold Coast and Sunshine Coast.
Now the gap is closer to 1.5 times. Against Brisbane and Perth, the premium has shrunk from 2.5 times to 1.9. “Sydney’s premium looks more justified than overpriced,” Tian says.
Melbourne is a more complicated story. Its long lockdowns hit confidence harder than anywhere else, sending affluent buyers to other states. But Tian believes that weakness may now be its strength.
“At only 17 per cent growth over five years, it significantly underperformed relative to its fundamentals as Australia’s second-largest city.”
If interest rate cuts arrive and confidence lifts, he says the very buyers who abandoned Sydney and Melbourne could return to find relative value they haven’t seen in years.
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Australia’s housing affordability crisis is being fuelled by chronic undersupply, planning delays and rising development costs, as politicians continue to focus on the wrong solutions.
3 min
Australia’s housing crisis will not be solved by first-home buyer incentives or tax changes alone, with leading property figures warning governments must tackle supply constraints if affordability is to improve.
Speaking at the Kanebridge Quarterly Property Leadership Summit in Sydney last week, expert project marketing specialist Sam Elbanna, property investor and fund manager Paul Miron and property consultant Karla McNeice said that a lack of housing supply remained the central issue facing the market.
Elbanna, Director of CPM Realty with more than 30 years’ experience in project sales, argued that successive governments had focused too heavily on stimulating demand rather than addressing the barriers preventing new housing from being delivered.
“The misconception is that politicians think the way to solve the housing crisis is to drive demand,” he said.
“The reality is that’s not the way. This is a supply-side problem, and it needs to be solved on the supply side.”
Drawing on his experience in project sales, Elbanna said policies designed to help first-home buyers often had unintended consequences, pointing to previous grants that ultimately flowed through to higher property prices.
Instead, he said developers were facing increasing red tape, approval delays and rising costs, which were discouraging new housing supply.
“In the absence of stock, demand exceeds supply,” he said.
Miron, a Co-Founder and Fund Manager of Msquared Capital, said the housing debate had become overly focused on tax policy while overlooking broader structural issues.
He argued that affordability challenges stemmed from a combination of factors, including planning constraints, supply shortages, migration levels and interest rates.
“No-one can be 100 per cent certain on the real reason for property prices is going up,” he said.
“The reason why property prices are higher is a combination of interest rates, lack of supply, migration, vacancy rates and maybe taxes play a role.”
Miron was critical of recent federal housing policy changes, warning they could reduce the number of new homes being built and further constrain supply that was even highlighted in the budget.
He also highlighted the importance of the property sector to the broader economy, noting that residential real estate and related industries employed more than one million Australians.
McNeice, who advises developers on sales strategy and market intelligence, said understanding buyers had become increasingly important as affordability pressures intensified.
While affordability remained a major consideration, she said today’s buyers were focused on value rather than simply price.
“People are looking for value for money,” she said.
She said buyers were increasingly evaluating factors such as transport connections, walkability, nearby amenities and flexible living spaces that could accommodate changing family needs.
“What infrastructure is going on? Can I walk to the shops? Can I meet people at the local cafe?” she said.
The panel also discussed the mounting pressures facing developers, with Elbanna arguing that many projects become financially unviable from the moment a site is purchased.
“The viability of a development happens at the moment the site is bought,” he said.
He said rising construction costs, higher interest rates and overly optimistic feasibility assumptions had left some developers exposed as market conditions changed.
While acknowledging the growing number of smaller and first-time developers entering the market, Elbanna said property development required expertise across finance, construction, marketing and legal disciplines.
“It is actually a business that requires a level of expertise,” he said.
Looking ahead, the panel agreed opportunities remained in the market despite current challenges.
Miron said property should continue to be viewed as a long-term investment and cautioned against trying to time short-term market movements.
McNeice said success would increasingly depend on identifying projects that genuinely met changing buyer expectations.
Elbanna said affordable housing remained achievable, but developers needed to deliver more than just homes.
“We can provide affordable housing in this country,” he said.
“But we’ve got to wrap that affordable housing with the things that people want.”
As Australia’s housing affordability debate intensifies, the panellists agreed on one point: without a meaningful increase in housing supply, demand-side measures alone are unlikely to solve the nation’s property challenges.
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